Hi David, Goldman Sachs and Citibank were net sellers the other day and DB was a net buyer (as was Commsec). I speculate that we were seeing a general sell off in commodities from the US funds over a fair while now if you look at the bigger picture.
However, as posted earlier today, contract prices for IO overnight actually rose. "Commodities" are seen as IO to a great degree and they are in fact a little different from a trading sense. We do get caught in the wash.
I think that with the AU$ dropping and US equities over bought for a long time now, the money flow may be coming offshore. So you might see a slowing down of the Goldman's and Citibanks net selling SDL (as we know) and an increase in buying. We also know there is very little shorts (hence the corrective wave down versus impulsive wave)
I also think that the Hanlong and DB cap raise pushed the price down circumstantially and the market followed. So it has been a perfect storm against the fundamentals. I agree that the increased DFS costs did not help.
I also hold the opinion that George Jones is one of the finest and highest integrity managers in the business and he/GC know the game better than we will ever know. They are looking at the longer term benefit of a major player rather than a day to day SO move which is futile.
This IS, IMO, one of the biggest potential investments that I have seen in many years and the risk/reward is excellent.
If as an investor you get too edgy and nervous about what you could have, should have had, didn't do, between the ups and downs then maybe you should turn your attention to being a trader. Or, look at the successful companies and their SP journey so you get a feel for the way things work.
Business building does not work in a linear fashion. Everyone should do what they are comfortable with but I just remind people that when the SP was .38 last year, we were all excited and now we are fearful. It is in the mind and that sentiment is what drives action.
Traders will trade (I have been one for 15 years - not with SDL though) and that is ok. But if you are an investor, then your judgement of risk needs to be with your faith in management and judgement of what a business journey really looks like - with its ups and downs. It is very difficult to chop and change between being an investor and trader and get through the other side.
Would a trader still be in Santos, BHP, Woodside, RIO, FMG etc... I bet "no". Traders in the long term, unless they are very disciplined in money management and happen to get on a trend that has no major bumps, statistically, lose. I know quite a few traders, and they are not very wealthy.
Business investors with acumen and courage - I do know a few of those - have built wealth. They have done it over a long time, not overnight. That is not to say that you blindly follow and hold no matter what. That is not a strategy. We always take a risk when investing or trading - the question to me is about risk/reward and giving a business some room to move - the prize needs to be "right" to take the risk.
It is a difficult game and you do ,as others have posted, look at all angles and keep on the ball. The hard part is to differentiate from what it likely to the noise of insto and trader and macro activity. Very easy to lose the plot. Hard to see the wood from the trees.
SDL Price at posting:
37.5¢ Sentiment: ST Buy Disclosure: Held
